January 21, 2010 - The new Czech Penal Code, in effect since January 1, 2010 considerably softens sentences for certain types of tax offences and has thus "saved" a number of suspects, including illegal cigarette producers, from tough punishment, daily Pravo writes.

The Justice Ministry said via its spokeswoman Jitka Zinke in late 2009 that the new Penal Code aims to toughen sentences for crimes against the life, health and human dignity, and not to toughen punishments for property crime, or even to soften it in certain cases. Addressed by Pravo on Sunday, January 17th Zinke said it is practice that will test the effectiveness of the new legislation.

A tobacco tax increase January 1, 2008, put Czech cigarette taxes above the European Union's required level of 64 euros ($85/1,736 Kč) per 1,000 cigarettes. As prices rise in the Czech Republic, so does illegal cigarette smuggling, particularly from Eastern Europe, and the production of counterfeit brand cigarettes. Philip Morris Czech Republic is the largest tobacco company. (Czech Republic - Philip Morris profits dropping 2-years in a row..)

Under the new Code, the preparation of tax evasion is no longer a crime punishable by up to ten years in prison. The punishment can be imposed only for accomplished tax evasion, the paper writes. As a result, two big cases of illegal cigarette production in north Bohemia have faded away in the first week of the new year alone, Pravo continues.

"Illegal production has become punishable only at the moment the cigarettes are really produced. If we uncover a house full of tobacco, filters and forged packagings, it is not punishable," says Lenka Bradacova, head of the Bar Association.

Some experts that the new Penal Code would hamper authorities' struggle against tax evasion, Pravo says.